The five-month long saga that turned the District’s hospitality industry upside down is almost over. Today, eight councilmembers voted to repeal Initiative 77, a ballot measure that voters passed 56 percent to 44 percent in June. The mandatory second vote will take place later this month. In the meantime, the Council passed emergency legislation that delays the implementation of 77 until March, preventing it from taking effect on Oct. 9.
Initiative 77 sought to eliminate the two-tier wage system where employers can pay tipped workers a lower base minimum wage ($3.89) instead of the standard minimum wage ($13.25). Tips from customers make up the difference, and if tips fail to carry a worker’s earnings over the standard minimum wage, the employer is required to pay the remainder.
Initiative 77 would have phased out the tipped minimum wage in eight increments until it reached $15 in 2025. Starting in 2026, there would no longer have been a tip credit—all workers would have been paid the same minimum wage directly from their employer.
Shortly after the measure passed, Council Chairman Phil Mendelson introduced a bill calling for an all-out repeal of Initiative 77. Councilmembers Jack Evans, Anita Bonds, Vince Gray, Kenyan McDuffie, Brandon Todd, and Trayon White joined him as co-sponsors.
Following much discussion and a 16-hour hearing, this group of legislators and At-Large Councilmember David Grosso voted for the repeal.
The arduous, emotional road to this conclusion illuminated several points in what was consistently touted in rhetoric as “the city’s second most important industry” after government. Wage theft occurs despite existing labor laws and sexual harassment is prevalent in bars and restaurants.
The national labor organization that got Initiative 77 on the ballot, Restaurant Opportunities Centers United (ROC), stressed that when workers are paid the full minimum wage directly from their employer, they’re less reliant on tips and less susceptible to harassment and abuse from patrons and management. Opponents of Initiative 77 pointed out that since the ballot measure doesn’t eliminate tipping, it’s not the panacea for solving one of the industry’s most serious problems.
Though it won’t give staunch supporters of Initiative 77 much solace, there are a few strategies built into the repeal bill to address some of these issues such as an anonymous tip line to call in wage theft claims and mandatory sexual harassment training. They appear to be borrowed in large part from Councilmember Elissa Silverman’s compromise amendment that failed earlier this morning by a vote of 8-5.
One possible obstacle is that Chief Financial Officer Jeffrey S. DeWitt notes in a financial impact statement that some of the extra provisions in the repeal bill such as the sexual harassment training, cost money and can’t be implemented until room is made in the budget. DeWitt’s office estimates the implementation of the bill will cost $744,000 in fiscal year 2019 and $2.6 million over the four-year financial plan.
Despite this, it would be shocking if Mayor Muriel Bowser didn’t sign the repeal bill. She has spoken out against Initiative 77 from the beginning and held a roundtable discussion with anti-77 tipped workers Friday where she restated her conviction to support the repeal.
“I have consistently stood up and spoke for D.C. workers who do not want to see their wages decreased and that’s exactly what will happen if Initiative 77 goes into effect,” Bowser said. “What the Council heard in hours and hours and hours of testimony is that Initiative 77 would do exactly that—decrease the wages of thousands of workers across the District of Columbia.”
There is precedent for overturning such a ballot initiative. ROC used a similar approach in Maine. But after the referendum passed, the state overturned it. The November 2016 referendum would have gradually raised the tipped minimum wage from $3.75 to $12 in 2024.
Where do we go from here? While tipped workers and restaurant owners who opposed Initiative 77 were the loudest, arguing that the increased labor costs would lead to job cuts, closures, and higher prices for consumers, there were tipped workers who say they could not come forward to voice their support for the initiative out of fear of retaliation from their employers.
Those tipped workers who did come forward, along with community advocates, researchers, and other supporters, shared concerns of racial and income disparities among bar and restaurant workers who may work at very different types of establishments. The wards that voted most favorably for Initiative 77 were predominantly African-American, for example.
The question now is whether the conversation about the professionalization of restaurant and bar workers will remain on the front burner along with topics of inclusivity, safety, and equity.